Qualified Term

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What Is Qualified Term (Qt)?

Qualified Term estimates the number of years you could live on your qualified assets at your current spending, assuming no growth, taxes, or inflation. This includes retirement accounts, 529, HSA, and annuities.

How Is Qualified Term (Qt) Calculated?

Why Is Qualified Term (Qt) Important?

Psychologically, clients tend to frame qualified retirement accounts as being earmarked for long-term objectives. This results in better, more consistent long-term investment behaviors.

While a client who is maximizing qualified retirement contributions may have higher savings rates and better investment behaviors, finding balance between retirement accounts and liquid accounts is critical. There are certainly times where clients might need to focus on building liquid assets over qualified retirement assets to provide greater flexibility.